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How GRU's bills compare to other utilities

Published: Sunday, November 4, 2012 at 6:01 a.m.

Last Modified: Saturday, November 3, 2012 at 6:53 p.m.

How does Gainesville Regional Utilities compare with the state's other electric utilities on residential rates?

The answer varies with usage, but GRU rates are toward the high end and above the state's other five large public utilities for households that use 1,000 kilowatt hours a month. That's the level widely accepted as the industry standard for residential bills and the approximate average usage for single-family homes in the GRU coverage area.

GRU officials point out that the average usage among their residential customers is below the industry standard and the other large utilities, which include Orlando, Jacksonville, Tallahassee, Ocala and Lakeland.

They attribute that lower usage to the large number of apartments, condominiums and townhouses in the college town and the utility's aggressive conservation and energy efficiency efforts.

A monthly rate comparison by the Florida Municipal Electric Agency (FMEA) and a quarterly snapshot by Jacksonville's utility show GRU rates rank higher than most other utilities in the state at several different usage levels.

GRU General Manager Bob Hunzinger said the electric bills are the result of a tiered rate structure designed to encourage conservation.

Under that system, rates rise with usage, and GRU becomes more expensive in comparison with other utilities as a customer's electric usage rises above the GRU average.

Upward pressure on rates also will come in about a year when the 100-megawatt biomass plant comes online. The projection is the purchase of power from that plant will increase bills by $10.56 a month for 1,000 kWh in 2014 and by a combined $23 per 1,000 kWh by 2019.

Here is a snapshot of how GRU bills compare with other state utilities as electric use rises. None of the rates include the surcharges that 27 of the state's 33 municipal utilities, including GRU, tack onto the bills of customers outside their city limits

At 500 kWh, GRU rates are in the middle of the other peer municipal utilities, according to the October quarterly report by Jacksonville's utility, JEA. The GRU bill is $59.68 — below Jacksonville, Ocala and Tallahassee and above Orlando and Lakeland.

Of the 21 Florida utilities included in that comparison, 14 had more expensive bills. GRU numbers show that 34 percent of the utility's customers use 500 kWh or below a month.

At 750 kWh, a GRU bill is $89.42, less than 12 of the 21 utilities in the latest JEA report. Lakeland, Tallahassee and Orlando are cheaper, while Ocala and Jacksonville are more expensive.

1,000 kWh is considered the industry standard for residential customers and is the primary focus of the rate comparison the Florida Municipal Electric Agency puts out on a monthly basis.

The $127.67 GRU bill was almost 7 percent above the average of $119.48 municipal-owned utilities like GRU charge and about 12 percent more than the $114.05 average for investor-owned utilities, such as Progress Energy and Florida Power & Light, the FMEA report from September showed.

Of the state's 33 public electric utilities, GRU had the seventh-highest residential rates. Gainesville was behind several small-town electric utilities. The largest utility with a more expensive bill was Keys Energy, with 28,000 customers. GRU has approximately 92,000.

Among the six large municipal electric utilities, Gainesville had the highest electric bill for 1,000 kWh. Tallahassee was next at $116.83. Lakeland was the lowest of that group at $101.72

At 1,500 kWh and 2,000 kWh, GRU has the highest residential electric rates of the utilities included in the JEA comparison. At 2,500 kWh, GRU has the highest residential electric bill in the state at $357.17, according to the FMEA report.

GRU officials point out that those usage levels are well above the utility average.

Approximately 1 percent of GRU residential customers use 2,500 kWh or more a month. More than 74 percent of the utility's customers use 1,000 kWh or less, and the average usage for a residential customer is 870 kWh a month, according to GRU.

Discussing utility rates, City Commissioner Thomas Hawkins said it does not provide a full picture to “cherry pick” electric rates. Instead, he looked at the “basket of services” the city provides, which also include water, wastewater and natural gas, at the average GRU customer's usage, which is below the industry standard for electric, water and wastewater utilities, according to the GRU budget.

By that comparison, the combined GRU rates fall in the middle of peer utilities. They are below Tallahassee and Jacksonville and above Orlando, Ocala and Lakeland.

“I feel comfortable there,” Hawkins said. “I feel very good in the middle of the pack.”

A Moody's Investment Services bond rating report from June reached a similar conclusion. The report noted that electric rates are 23 percent above the state average, but the combined rates for all utility services GRU provided were “much more competitive.”

Commissioner Todd Chase, on the other hand, said he felt emphasis on the basket of services “masks” the electric rates. He noted that thousands of electric customers do not receive all services in the “basket.” GRU has approximately 92,000 total electric customers and 34,000 total natural gas customers.

“I always thought the basket of services was more of a marketing tool than an analytical tool to show us what our rates are,” Chase said. “In my opinion, you have to look at each service on its own merits. Anybody who says we don't have among the highest (electric) rates in the state is blind to the issue.”

<p>How does Gainesville Regional Utilities compare with the state's other electric utilities on residential rates?</p><p>The answer varies with usage, but GRU rates are toward the high end and above the state's other five large public utilities for households that use 1,000 kilowatt hours a month. That's the level widely accepted as the industry standard for residential bills and the approximate average usage for single-family homes in the GRU coverage area.</p><p>GRU officials point out that the average usage among their residential customers is below the industry standard and the other large utilities, which include Orlando, Jacksonville, Tallahassee, Ocala and Lakeland.</p><p>They attribute that lower usage to the large number of apartments, condominiums and townhouses in the college town and the utility's aggressive conservation and energy efficiency efforts.</p><p>A monthly rate comparison by the Florida Municipal Electric Agency (FMEA) and a quarterly snapshot by Jacksonville's utility show GRU rates rank higher than most other utilities in the state at several different usage levels.</p><p>GRU General Manager Bob Hunzinger said the electric bills are the result of a tiered rate structure designed to encourage conservation.</p><p>Under that system, rates rise with usage, and GRU becomes more expensive in comparison with other utilities as a customer's electric usage rises above the GRU average.</p><p>Upward pressure on rates also will come in about a year when the 100-megawatt biomass plant comes online. The projection is the purchase of power from that plant will increase bills by $10.56 a month for 1,000 kWh in 2014 and by a combined $23 per 1,000 kWh by 2019.</p><p>Here is a snapshot of how GRU bills compare with other state utilities as electric use rises. None of the rates include the surcharges that 27 of the state's 33 municipal utilities, including GRU, tack onto the bills of customers outside their city limits</p><p>At 500 kWh, GRU rates are in the middle of the other peer municipal utilities, according to the October quarterly report by Jacksonville's utility, JEA. The GRU bill is $59.68 — below Jacksonville, Ocala and Tallahassee and above Orlando and Lakeland.</p><p>Of the 21 Florida utilities included in that comparison, 14 had more expensive bills. GRU numbers show that 34 percent of the utility's customers use 500 kWh or below a month.</p><p>At 750 kWh, a GRU bill is $89.42, less than 12 of the 21 utilities in the latest JEA report. Lakeland, Tallahassee and Orlando are cheaper, while Ocala and Jacksonville are more expensive.</p><p>1,000 kWh is considered the industry standard for residential customers and is the primary focus of the rate comparison the Florida Municipal Electric Agency puts out on a monthly basis.</p><p>The $127.67 GRU bill was almost 7 percent above the average of $119.48 municipal-owned utilities like GRU charge and about 12 percent more than the $114.05 average for investor-owned utilities, such as Progress Energy and Florida Power & Light, the FMEA report from September showed.</p><p>Of the state's 33 public electric utilities, GRU had the seventh-highest residential rates. Gainesville was behind several small-town electric utilities. The largest utility with a more expensive bill was Keys Energy, with 28,000 customers. GRU has approximately 92,000.</p><p>Among the six large municipal electric utilities, Gainesville had the highest electric bill for 1,000 kWh. Tallahassee was next at $116.83. Lakeland was the lowest of that group at $101.72</p><p>At 1,500 kWh and 2,000 kWh, GRU has the highest residential electric rates of the utilities included in the JEA comparison. At 2,500 kWh, GRU has the highest residential electric bill in the state at $357.17, according to the FMEA report.</p><p>GRU officials point out that those usage levels are well above the utility average.</p><p>Approximately 1 percent of GRU residential customers use 2,500 kWh or more a month. More than 74 percent of the utility's customers use 1,000 kWh or less, and the average usage for a residential customer is 870 kWh a month, according to GRU.</p><p>Discussing utility rates, City Commissioner Thomas Hawkins said it does not provide a full picture to “cherry pick” electric rates. Instead, he looked at the “basket of services” the city provides, which also include water, wastewater and natural gas, at the average GRU customer's usage, which is below the industry standard for electric, water and wastewater utilities, according to the GRU budget.</p><p>By that comparison, the combined GRU rates fall in the middle of peer utilities. They are below Tallahassee and Jacksonville and above Orlando, Ocala and Lakeland.</p><p>“I feel comfortable there,” Hawkins said. “I feel very good in the middle of the pack.”</p><p>A Moody's Investment Services bond rating report from June reached a similar conclusion. The report noted that electric rates are 23 percent above the state average, but the combined rates for all utility services GRU provided were “much more competitive.”</p><p>Commissioner Todd Chase, on the other hand, said he felt emphasis on the basket of services “masks” the electric rates. He noted that thousands of electric customers do not receive all services in the “basket.” GRU has approximately 92,000 total electric customers and 34,000 total natural gas customers.</p><p>“I always thought the basket of services was more of a marketing tool than an analytical tool to show us what our rates are,” Chase said. “In my opinion, you have to look at each service on its own merits. Anybody who says we don't have among the highest (electric) rates in the state is blind to the issue.”</p>